You don't make money in the stock market by taking profits or selling winners, you make money in the stock market by finding winners and letting them run. As investing legend Warren Buffett reportedly said: "My favourite holding period is forever" which goes to show why buy to hold is generally the simplest and most successful investing policy.
Of course it's no use buying any old stocks as the majority of companies on the stock market are not investment grade and many don't even turn a profit.
In fact if you're looking to buy forever you need to focus on the very highest quality end of the market in the search for companies with strong long-term outlooks backed up by their competitive advantages.
Below I have three of the best quality companies built for the future that I would look to buy and potentially never sell.
XERO FPO NZ (ASX: XRO) is the cloud-accounting business still well positioned to harness the transition of small businesses globally from desktop-based accounting to online accounting.
Given the size of its addressable markets globally this market-leading business could still be growing strongly for a long time yet in my opinion. It recently passed 1 million subscribers and will report its full-year financial results over the week beginning May 8.
Westfield Corp Ltd (ASX: WFD) is the family run business behind the giant Westfield shopping centres in the US and Europe. It's focused on constructing and operating market-leading shopping centres on prime pieces of real estate across the world's leading major cities.
It's this strategy that means it retains strong long-term growth prospects and with shares at $9.10 I would be shocked if it doesn't beat the market's returns over the next 10 years.
REA Group Limited (ASX: REA) as the operator of property website realestate.com.au seems to have a strong outlook based on its solid competitive position as part of a duopoly with Fairfax Media Limited's (ASX: FXJ) domain.com.
In addition REA Group has the opportunity to generate some solid long-term earnings per share growth thanks to its full or part ownership of property websites across South East Asia, India and the US. It also has the support of majority owners News Limited (ASX: NWS) and I expect the shares could deliver a strong 5-10 years ahead thanks in part to the potency of property as an asset class. Shares look on the expensive side at $62.22 and I would wait until it updates on performance for the quarter ending March 31 2017 in the next few days before looking to build a position.
